In the highly competitive market place, businesses are required to invest an essential amount of time and money in developing new and innovative products and services in order to compete with opposition businesses and ensure their survival. This investment directly contributes to the building of a brand that in turn attracts goodwill in the market place. Customers associate the quality of the products and services to a name and build trust and loyalty towards it. Consequent to this reputation and clientele which a business attracts through good service and products, often other businesses, unimpressively so, capitalise on that hard work by imitating that business or services and/or creating products that are very similar or the same as the original products – perhaps mostly unlawfully so. Mostly, these products or services are not of the same quality as the original and this could lead to the proprietor business suffering damages and could lead to the dilution of the brand.
A trademark may be one of the greatest assets that a business can ever possess. A registered trademark is an asset which has value. It may be licensed, franchised, sold and even provided as security for a loan. For example, a brand like Apple constitutes a name on a product which is indicative of the quality that can be expected from the manufacturer and, in addition, determines the price that the owner may ask.
Why register a trademark?
In registering a trademark a business is protecting the identity of its business. Under the Trademarks Act a business is afforded protection against others using the same or similar trademark to identify their business and or products. This means that should a business or individual institute action against an infringing party it need only prove that it is in possession of a lawful trademark registration. The burden of proof then rests on the infringing party to prove that they are not acting unlawfully and infringing on the rights of the business owning such registration. The registration of a trademark offers the owner of the mark concrete proof of its legally protected rights and eliminates the need to rely on the common law.
Common law protection against infringement
In common law, a business or other proprietor is afforded protection against infringement through the law of unlawful competition and in particular under an action of passing-off. However, quite to the contrary with trademarks, in common law the burden of proof is on the owner of the business whose rights are being infringed upon to prove that another party is passing off another’s business as its own. This means that the business’s rights being infringed upon has to comply with all the requirements for an action of passing-off which include, amongst others, that it has a reputation in the industry. This is often quite difficult and costly to prove especially when the business whose rights are being infringed upon, is not well-known or does not possess the commercial footprint of its competitors. Proving a reputation in the market place may lead to costly market research and high legal bills.
Definition of a Mark
A trademark is defined as a mark used to distinguish the goods or services of one undertaking from those of other undertakings. This can be in the form of words, drawings, signs, symbols, colours or combinations thereof. A trademark can be a slogan, name, logo, a specific shape or a combination thereof. The following facts should be considered when registering a trademark:
- It takes approximately 2 years to register a trademark;
- In terms of Section 9 of the Trademarks Act a mark must be distinctive and be able to distinguish goods and services from the same kind of goods or services which are connected in the course of trade with another;
- Section 10 of the Trademarks Act places prohibitions on the registration of marks and lists the negative attributes which trademarks may not possess;
- A trade mark can therefore only be allowed to be registered and remain on the register if it is distinctive, as defined in section 9 and if it does not contravene any of the provisions of section 10;
- Trademarks are territorial and registration only grants rights in the country in which the trade mark is registered. If a trade mark owner wishes to use and protect his trade mark in more than one country, then he should apply for registration of his trade mark in each of those countries;
- Trademarks registration is subject to classification in one of 45 different classes. The first 34 classes relate to goods and the remaining 11 classes relate to services (e.g. banking services, construction, transport and education);
- It is possible for a product or service to be registered in more than one class; and
- Businesses have to renew their trademarks every 10 years.
Considerations when registering a trademark:
- Be creative in choosing a trademark – this will ensure that a mark distinguishes the business’s products from that of others in the market place, which in turn mitigate the chances of a mark infringing on a mark already on the register;
- Be pro-active and protect marks from inception – this may prevent unnecessary time and resources spent in protecting unregistered marks by way of passing off; and
- Businesses should seek the advice of a professional in ascertaining in what class to register your mark as registration in the wrong class may render inefficient protection.
Louw du Toit – Barnard Incorporated Attorneys, Centurion
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